Confirmation of Payee: It’s not a silver bullet but every little helps…

The big picture

UK Finance claim that the banking industry stopped £4.5 million of fraud a day in the first half of 2019 – that’s a whopping £820 million of unauthorised fraud prevented.

On top of this £408 million was stolen by criminals through unauthorised card, remote banking and cheque fraud.

These eye watering numbers continue to add up as a further £208 million was lost to authorised push payment (APP) fraud where customers were tricked into authorising a payment to an account controlled by a criminal.

Not surprisingly the banking industry is responding but, as with many things, there is not a single silver bullet that will address payment fraud.

But, as Tesco might say, ‘every little helps’.

At the end of March we’ll see the implementation of a fundamental change in the way we make online payments.

The change is called ‘Confirmation of Payee’ and it seeks to reduce fraud and mitigate keyboard errors.

Has your bank told you about Confirmation of Payee (CoP) yet?

Las week I conducted a Twitter poll to see whether banks had been preparing their customers. The result was, perhaps, not a surprise:

Only 15% of voters reckon that they are up to speed on CoP.

CoP will introduce a bit of payment friction to our online payments but if the initiative mitigates fraud and reduces the stress of sending money to people then a small bit of friction is a reasonable price to pay.

So, what do I need to know about Confirmation of Payee?

Confirmation of Payee is an account name checking service to give businesses and consumers greater assurance that they are sending payments to their intended recipient.

Rather than reinventing the wheel, I’ll share how Barclays have briefed its customers:

Is it Robert, Bob, Rob or Rabbie?

When you are paying someone new you will now need more than just their Sort Code and Account Number – you’ll also need their full name (not necessarily the name you know them as but as recorded on their bank account).

When you are making the payment via online banking you’ll need to look at the response your bank gives you and if you receive a ‘partial’ or ‘no match’ response your best bet will be to stop making the payment and double check you are paying the right person.

If you ignore ‘partial’ and ‘no match’ responses from your bank and the money ends up in the wrong place (either due to fraud or mistyping the numbers) you may be liable and not get your money back!

Potential outcomes when making a payment for the first time

The following summary of the type of responses your bank might present on your payment screen provides a little more detail:

Also don’t forget, if someone is paying you make sure that you give them your full name (as recorded on your bank account) as well as your Sort Code and Account Number.

If you don’t you might find that payments you are expecting in the coming weeks are delayed.

When will my bank start using CoP?

After the 31 March 2020 (at the latest) Bank of Scotland, Barclays, HSBC, Lloyds, National Westminster, Nationwide, Royal Bank of Scotland, Santander and Ulster Bank will all start performing Confirmation of Payee checks when you make a payment to a person the first time.

These institutions have all been directed by the regulator to introduce CoP although it is fully expected that other institutions will introduce this account name checking service in the coming months.

Want to know more?

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